Premier to sell Pickle Crow Project
Shares Issued: 68,189,742
THUNDER BAY, ON, Nov. 5 /CNW/ - PREMIER GOLD MINES LIMITED (TSX:PG) is
pleased to announce that it has signed a letter of intent ("LOI") to sell its
interest in the Pickle Crow Gold Project (the "Project") in northwestern
Ontario to an unrelated privately held Ontario company, PC Gold Inc., which
has been created specifically to consolidate ownership interests in the
Project. PC Gold intends to raise financing and implement a major program of
exploration and development on the Project, with the intent of returning the
past-producing Pickle Crow Gold Mine to production, and to eventually complete
a transaction to become a public issuer. Upon receipt of all payments, Premier
will receive the equivalent of $5.3 million in cash and shares of PC Gold, and
will retain a 0.5% Net Smelter Return Royalty ("NSR") with respect to any
future gold produced from the Project.
<<
Under the terms of the LOI, Premier will receive $1.5 million in cash and
$3.8 million in shares of PC Gold under the following terms:
1) $25,000 cash within two weeks of signing;
2) $475,000 cash and $3.8 million in shares of PC Gold on closing of the
transaction;
3) $250,000 cash on the 6 month anniversary date;
4) $250,000 cash on the 12 month anniversary date;
5) $500,000 cash on the 18 month anniversary date;
6) PC Gold will retain the right to purchase Premier's NSR at any time
for the sum of $2.5 million.
>>
The Project is host to the past-producing Pickle Crow Gold Mine that
produced 1.47 million ounces of gold between 1935 and 1966, and closed in a
low gold price ($35/oz) environment. The Pickle Crow Gold Mine is found within
the Uchi geological subprovince, the same belt of rocks in which the mines at
Red Lake, Ontario, are found. A considerable body of historical data exists
which suggests the mine shut down with resources in place, and untapped open
pit and underground exploration potential. The Project also hosts a new mill
built by a private partner in the Project who will also be consolidating its
interest into PC Gold.
"The sale of Pickle Crow, a non-core asset of the company, will augment
our already strong financial position" stated Ewan Downie, President of
Premier. "The proceeds of the sale will be used for the further development of
our core projects, and may be used to help fund further strategic acquisitions
by the corporation".
In other news, drilling continues with three drill rigs at the
Rahill-Bonanza Project in Red Lake, a joint venture with Red Lake Gold Mines,
an affiliate of Goldcorp Inc (TSX:G NYSE:GG). The Rahill-Bonanza project is
located immediately west of, and along strike from, the Red Lake Gold Mines
complex. Additionally, drilling with two drills is underway at the Geraldton
Project in northwestern Ontario, a joint venture with Roxmark Mines Limited
(TSXV:RMK)
Premier Gold Mines Limited is a Canadian-based mineral exploration and
development company with diverse property holdings that include several
projects and deposits in Northwestern Ontario and a joint venture in Mexico.
In the Red Lake gold mining camp, two of these are operated in joint venture
with Goldcorp Inc. (TSX:G).
The statements made in this Press Release may contain forward-looking
statements that may involve a number of risks and uncertainties. Actual events
or results could differ materially from the Company's expectations and
projections.
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